1-1 By: Ogden S.B. No. 341
1-2 (In the Senate - Filed February 1, 1999; February 3, 1999,
1-3 read first time and referred to Committee on Finance;
1-4 April 19, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 9, Nays 0; April 19, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 341 By: Ogden
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to taxing the sale, use, or consumption of Internet access
1-11 service.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subchapter A, Chapter 151, Tax Code, is amended
1-14 by adding Sections 151.00393 and 151.00394 to read as follows:
1-15 Sec. 151.00393. "INTERNET." "Internet" means collectively
1-16 the myriad of computer and telecommunications facilities, including
1-17 equipment and operating software, that comprise the interconnected
1-18 worldwide network of networks that employ the Transmission Control
1-19 Protocol/Internet Protocol, or any predecessor or successor
1-20 protocols to that protocol, to communicate information of all kinds
1-21 by wire or radio.
1-22 Sec. 151.00394. "INTERNET ACCESS SERVICE." (a) "Internet
1-23 access service" means a service that enables users to access
1-24 content, information, electronic mail, or other services offered
1-25 over the Internet and may also include access to proprietary
1-26 content, information, and other services as part of a package of
1-27 services offered to consumers.
1-28 (b) "Internet access service" does not include and the
1-29 exemption under Section 151.325 does not apply to any taxable
1-30 service listed in Sections 151.0101(a)(1)-(15), unless the taxable
1-31 service is provided in conjunction with and is merely incidental to
1-32 the provision of Internet access service.
1-33 SECTION 2. Subsection (a), Section 151.0101, Tax Code, is
1-34 amended to read as follows:
1-35 (a) "Taxable services" means:
1-36 (1) amusement services;
1-37 (2) cable television services;
1-38 (3) personal services;
1-39 (4) motor vehicle parking and storage services;
1-40 (5) the repair, remodeling, maintenance, and
1-41 restoration of tangible personal property, except:
1-42 (A) aircraft;
1-43 (B) a ship, boat, or other vessel, other than:
1-44 (i) a taxable boat or motor as defined by
1-45 Section 160.001;
1-46 (ii) a sports fishing boat; or
1-47 (iii) any other vessel used for pleasure;
1-48 (C) the repair, maintenance, and restoration of
1-49 a motor vehicle; and
1-50 (D) the repair, maintenance, creation, and
1-51 restoration of a computer program, including its development and
1-52 modification, not sold by the person performing the repair,
1-53 maintenance, creation, or restoration service;
1-54 (6) telecommunications services;
1-55 (7) credit reporting services;
1-56 (8) debt collection services;
1-57 (9) insurance services;
1-58 (10) information services;
1-59 (11) real property services;
1-60 (12) data processing services;
1-61 (13) real property repair and remodeling;
1-62 (14) security services; [and]
1-63 (15) telephone answering services; and
1-64 (16) Internet access service.
2-1 SECTION 3. Subchapter H, Chapter 151, Tax Code, is amended
2-2 by adding Section 151.325 to read as follows:
2-3 Sec. 151.325. BASIC FEE FOR INTERNET ACCESS SERVICE.
2-4 (a) The sale, use, or other consumption in this state of Internet
2-5 access service is exempted from the taxes imposed by this chapter
2-6 in an amount not to exceed the first $25 of a monthly charge.
2-7 (b) The exemption provided by this section applies without
2-8 regard to:
2-9 (1) whether the Internet access service is bundled
2-10 with another service, including any taxable service listed in
2-11 Sections 151.0101(a)(1)-(15); or
2-12 (2) the billing period used by the service provider.
2-13 (c) The exemption in this section applies to the total sales
2-14 price the service provider charges for Internet access to a
2-15 purchaser, without regard to whether the service provider charges
2-16 one lump-sum amount or separately bills the purchaser for each
2-17 user.
2-18 SECTION 4. (a) This Act takes effect on the first day of the
2-19 first calendar quarter beginning on or after the date that it may
2-20 take effect under Section 39, Article III, Texas Constitution.
2-21 (b) The change in law made by this Act does not affect taxes
2-22 imposed before the effective date of this Act, and the law in
2-23 effect before the effective date of this Act is continued in effect
2-24 for purposes of the liability for and collection of those taxes.
2-25 SECTION 5. The importance of this legislation and the
2-26 crowded condition of the calendars in both houses create an
2-27 emergency and an imperative public necessity that the
2-28 constitutional rule requiring bills to be read on three several
2-29 days in each house be suspended, and this rule is hereby suspended,
2-30 and that this Act take effect and be in force according to its
2-31 terms, and it is so enacted.
2-32 * * * * *